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Contribution Details
| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Divesting from Coal: Implications on Industry Structure and Borrowing Costs |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Date | 2021 |
| Abstract Text | Financial companies are increasingly divesting from coal to reduce their environmental footprint. Debt divestment is real and significant: By 2020, 68 coal divestment plans were announced by banks managing loan books of nearly USD 20tn. Divestors reduce their exposure to the coal sector by 50% in the year of their divestment announcement, but the exposure increases again in subsequent years. Nevertheless, the social and governance scores of coal lenders increase by 5.4% between 2015 and 2019. Furthermore, the divestment movement has no significant impact on loan spreads. Therefore, the efficacy of debt divestment to curb coal production remains doubtful. |
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